Ecodev - Chapter 5

Republic of the Philippines
STATE UNIVERSITY
The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph
College of Accountancy, Business, Economics and International Hospitality Management
MIGRATION AND URBANIZATION
IN PARTIAL FULFILLMENT OF THE COURSE SUBJECT

ECO 310
SUBMITTED TO:
MR. EDS MENDOZA
INSTRUCTOR
BACHELOR OF SCIENCE IN MANAGEMENT ACCOUNTING

BSMA - 1202
GROUP 4
Carandang, Thea Ysabelle M.

Del Mundo, Trisha Mae E.
Ilagan, Mary Joyce M.
Perez, Kathleen G.
Rayos,Venice C.
Silang, Sophia Merylle R.
Tenorio, Prince Charles A.
Leading Innovations, Transforming Lives, Building the Nation

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
CHAPTER 5
MIGRATION and URBANIZATION
INTRODUCTION
In this chapter, we focus on one of the most complex and nuanced dilemmas of the
development process: the phenomenon of massive and historically unprecedented movements
of people from the rural countryside to the burgeoning cities of Africa, Asia, and Latin America.
In Chapter 6, we documented the extraordinary increase in world and especially developing
country population over the past few decades. By 2050, world population is expected to exceed
9 billion people, and nowhere will population growth be more dramatic than in the cities of the
developing world.
Indeed, according to United Nations estimates, the world became more urban than rural
in 2008, for the first time in human history. After reviewing trends and prospects for overall
urban population growth, we examine in this chapter the potential role of cities—both the
modern sector and the urban informal sector—in fostering economic development. We then turn
to a well- known theoretical model of rural-urban labor transfer in the context of rapid growth
and high urban unemployment. In the final section, we evaluate various policy options that
governments in developing countries may wish to pursue in their attempts to moderate the
heavy flow of rural-to urban migration and to ameliorate the serious unemployment problems
that continue to plague their crowded cities.
INTENDED LEARNING OUTCOMES
After studying this module, the students will be able to:

1. Explain the term Migration and Urbanization;
2. Differentiate Internal from International Migration;
3. Discuss the Push-Pull Theory of Migration;
4. Define Shantytown;
5. Explain why most people in any country migrate to other countries.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
I. URBANIZATION: TRENDS AND LIVING CONDITIONS
What is Urbanization?
Urbanization refers to the mass movement of populations from rural to urban settings
and the consequent physical changes to urban settings. It can also refer to the following:
Urbanization is the Agglomeration of Population in Cities.

Growth of the Proportion of the Population Living in Cities.
Demographic Process.
Urban Population Growth (Natural Increase or Migration).
Infrastructure Process.
Expansion or Urban Infrastructures and Land Use.
Economic Process.
Creation of Secondary, Tertiary, and Qua-ternary Sectors.
Creates a society where values and lifestyles are urban.
Causes of Urbanization
Historical
Trade Routes.
Social
Increased Social Interactions.
Institutions Representing a Society (Government, Religion, and Education).
Economic
Linked with Agricultural Surpluses.
Increased Economic Opportunities.
Access to Labor.
Specialization.
Economies of Scale Agglomeration.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
Various Causes of Urbanization (Conserve Energy Future, 2023)
1. Industrialization
Industrialization is a trend representing a shift from the old agricultural economics

to a novel non-agricultural economy, which creates a modernized society. Through the
industrial revolution, more people have been attracted to move from rural to urban areas
on account of improved employment opportunities. The industrialization has increased
employment opportunities by giving people the chance to work in modern sectors in job
categories that aids to stir economic developments.
2. Social Benefits and Services
There are numerous social benefits attributed to life in cities and towns.
Examples include better educational facilities, better living standards, better sanitation
and housing, better health care, better recreation facilities, and better social life in
general. On this account, more and more people are prompted to migrate into cities and
towns to obtain a wide variety of social benefits and services which are unavailable in
rural areas.
3. Modernization and Changes in the Mode of Living
As urban areas become more technology savvy together with highly

sophisticated communication, infrastructure, medical facilities, dressing code,
enlightenment, liberalization, and other social amenities availability, people believe they
can lead a happy life in cities. In urban areas, people also embrace changes in the
modes of living namely residential habits, attitudes, dressing, food, and beliefs. As a
result, people migrate to cities and the cities grow by absorbing the growing number of
people day after day.
4. Rural-Urban Transformation
As localities become more fruitful and prosperous due to the discovery of

minerals, resource exploitation, or agricultural activities, cities start emerging as the rural
areas transform into urbanism. The increase in productivity leads to economic growth
and higher value-added employment opportunities. This brings about the need to
develop better infrastructure, better education institutions, better health facilities, better
transportation networks, the establishment of banking institutions, better governance,
and better housing. As this takes place, rural communities start to adopt the urban.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
culture and ultimately become urban centers that continue to grow as more people move
to such locations in search of a better life.
Urbanization Trends and Projection
While the world as a whole became majority urban in 2008, even the developing world is
expected to become majority urban before 2020 (although the United Nations projects that the
least developed countries will not reach this milestone until after 2050). Currently, most urban
growth has occurred in cities in Asia and Africa. Indeed, in 2012 the United Nations projected
that the urban population of Africa will grow from 414 million in 2012 to over 1.2 billion by 2050;
and the urban population of Asia will grow from 1.9 billion to 3.3 billion. Thus taken together, the
United Nations projects that Asia and Africa will account for some 86% of the global urban
population increase in this period. In fact, there will be so much rural-to-urban migration in Asia
that its rural population will actually decline in this period, as seen in Figure 1.
Figure 1. Changes in Urban and Rural Population by Major Areas between 2011 and 2050 (in millions)
Urbanization rates increase whenever urban population growth exceeds rural population
growth. The positive association between urbanization and per Capita income is one of the most
obvious and striking “stylized facts” of the development process. Generally, the more developed
the country, measured by per Capita income, the greater the share of population living in urban
areas. The black linear fit line in Figure 2 shows urbanization versus the log of 2010 GNI per
Capita; the highest-income countries, such as Japan, are also among the most urbanized, while
the very poorest countries, such as Burundi, are among the least urbanized. Urbanization is
proceeding rapidly.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
Figure 2. Relationship between Urbanization and Per Capita GDP, 2010 with Comparison to Relationship
in 1960
Urban Population and Per Capita Income across Selected Countries
At the same time, while individual countries become more urbanized as they develop,
today’s poorest countries are far more urbanized than today’s developed countries were when
they were at a comparable level of development, as measured by income per Capita. Returning
to Figure 2, the dashed blue linear fit line shows the relationship between income per Capita
and urbanization that prevailed in 1960. A comparison of the two lines reveals that for any given
income in 2010, a country that had the identical income in 1960 was significantly less urbanized.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
Urban Explosion
Urban population growth is the most important change in population geography. The
vast waves of immigration have fueled tremendous rates of urban population growth around the
world. About 50% of the global population, 3 billion, lives in cities. Almost all the population
growth between 2000 and 2030 will occur in cities. By 2050, 6.2 billion people will live in cities,
more than the current (2000) population. The poorest countries will account for the majority of
this growth.
Annual Growth of World and Urban Population, 1950-2030 (in millions)
Developed Countries
Developed countries are already urbanized.

Passed through the rural- urban migration process.
Concurrent with demographic transition and industrialization.
Developing Countries
Going through a major phase of urbanization.

Urbanization mainly occurs in developing countries.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
Stages of Urbanization
Why People Move to Urban Areas?
 Major Changes in the World.

 Migration.
 Urbanization and Economic Survival.
Decision to move to an urban area.
Cities are the largest labor markets.
 Push-Pull Consideration.
“Pull” of the cities may determine the destination. Migrants are pulled toward cities:
Prospect of Jobs and Higher Incomes.
“Push” factors predominate as the motivation to move. Pushed out of rural areas:
Poverty, Lack of Land, Declining Agricultural Work, War, and Famine.
FACTOR CONDITION ISSUES

Instability, Disasters, Wars, Push Creation of Refugees.
Famines Cities as Safe Heavens.
Expectation of Jobs Pull Higher Wages but Higher
Living Costs.
Larger Labor Markets.
Informal Sector Dominant.
Deterioration of Rural Lines Push Demographic Growth.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124

Land Tenure (Landless
Peasants).
Mechanization (Surplus
Labor).
Transportation Intervening Opportunities Increased Mobility.
Lower Costs.
Construction of Roads and
Rails.
Access to Rural Markets.
More and Better Services Pull Better School and Health
Services.
Access to Water and
Electricity.
Overcrowding and Pollution.
What is the Current State of Global Urbanization?
Megacities and Urban Regions
One of the most significant of all modern demographic phenomena is the rapid
growth of cities in developing countries. The urban shift over time has led to the
emergence of the megacity – a city with a population of 10 million or more. New York
City and Tokyo were the first known megacities, both reaching an urban conglomeration
of over 10 million by the 1950s. But today they are far from alone in their size. In 2018
there were 33 megacities across the planet – from Sao Paulo, Brazil to Lagos, Nigeria
and London, England to Shanghai, China – and all major global regions except Oceania
are marked with megacities.
Most of the cities that have reached the 10 million marker in recent years are
located in Asia and Africa. In fact, it’s where six of the eight newest megacities can be
found and where nine of the 10 projected 2030 megacities will be located. These regions
are also home to the fastest growing megacities. A combination of factors has led to this
growth including migration from rural areas, high fertility rates, and widening of the city’s
boundaries. The population is outpacing almost all support structures in the city where
the threat of food shortages, traffic congestion, and insufficient education facilities have
become a stark reality. Today, some 56% of the world’s population – 4.4 billion
inhabitants – live in cities. This trend is expected to continue, with the urban population
more than doubling its current size by 2050, at which point nearly 7 of 10 people will live
in cities.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
What Characterizes the Prevailing Urban Environment?
The speed and scale of urbanization brings challenges, such as meeting accelerated
demand for affordable housing, viable infrastructure including transport systems, basic services,
and jobs, particularly for the nearly 1 billion urban poor who live in informal settlements to be
near opportunities. Rising conflicts contribute to pressure on cities as 50% of forcibly displaced
people live in urban areas. Many of the urban dwellers, particularly women and their children,
are among the poorest in the world.
Difficulty to Access Housing:

Economic Cost
Availability
Shanty Towns: A Solution to Housing Shortage Problems
“Shantytown” is a special and age-old urban residential space type and a global
phenomenon, which is generally described as uninhabitable informal housing and areas
inhabited by high-density, low-income groups, e.g., Favelas (Brazil), Pueblos Jovenes (Young
Towns), Asentamiento Irregulares (Irregular Settlements), Villas Miseria (Miserable Villages,
Argetina), and Jughi Jopri (India). It is also a concentrated reflection of an unbalanced and
inadequate development of the urban social space, which restricts the development of a high-
quality and sustainable social economy. It is perhaps the most visible sign of widespread
poverty. About 25% of the surface of cities in developing counties is covered by Shanty Towns.
A 30-60% of the urban population.
Dwellings are built by the current or original occupant.

Rudimentary construction materials.
Did not receive a construction permit.
Do not follow norms in the term of housing and sanitation.
Inhabitants have no legal title to the land.

Most are located in the areas being declared inhabitable.
Own by the municipality.
Abandoned private land.
Lack of urban services.

Generally not serviced by public utilities such as tap water, electricity, roads,
public transportation and sewage.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
Growth Process
 Land was illegally sold to dwellers being framed.

 Inflow of people expelled from poverty in rural areas.
 People expelled from gentrification in downtown areas.
 Owners of land have divided it in small lots and sold it in order to have a higher profit.
Although population growth and accelerated rural-urban migration are chiefly

responsible for the explosion in urban shantytowns, part of the blame rests with governments.
Their misguided urban-planning policies and outmoded building codes often mean that a
majority of new urban housing is “illegal.” In fact, a widely held belief in some developing
countries is that governments have intentionally sought to make the lives of new migrants as
miserable as possible, hoping this will be an effective deterrent to prospective migrants; but
when people come to cities anyway, slums are the inevitable result. But often even
government’s best efforts to neglect, discriminate against, or even destroy slums are not
enough to cancel out the many other distortions in disregarded, economically stagnant, or
socially oppressive rural areas.
As we move forward in the 21st century, the global population is likely to continue
growing. Urban areas will continue to grow with the population. This continual growth presents
complex challenges as we prepare for the cities of the future. How we choose to manage
urbanization will have consequences for our world for many years to come. As the world
continues to urbanize, sustainable development increasingly on the successful management of
urban growth.
II. THE ROLE OF CITIES
To a large degree, cities are formed because they provide cost advantages to producers
and consumers through what are called agglomeration economies. As noted by Walter Isard,
these agglomeration economies come in two forms, Urbanization economies are effects
associated with the general growth of a concentrated geographic region. Localization
economies are effects captured by particular sectors of the economy, such as finance or
automobiles, as they grow within an area. When transportation costs are significant, users of
the outputs of an industry may benefit from a nearby location to save on these costs. This
benefit is a type of forward linkage. In addition, firms of the same or related industries
may benefit from being located in the same city, so they can all draw on a large pool of workers
with the specific skills used in that sector or from specialized infrastructure. This is a type of
backward linkage. Workers with specialized skills appropriate to the industry prefer to be located
there as well so that they can easily find a new job or be in a position to take advantage of
better opportunities.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
 Agglomeration Economies - Cost advantages to producers and consumers from

location in cities and towns, which take the forms of urbanization economies and
localization economies.
 Urbanization Economies Agglomeration effects associated with the general growth

of a concentrated geographic region.
 Localization Economies Agglomeration effects captured by particular sectors of

the economy, such as finance or autos, as they grow within an area.
Industrial Districts
Firms located in such industrial districts also benefit from the opportunity to
contract out work easily when an unusually large order materializes. Thus, a firm of modest
size does not have to tum down a big job due to lack of capacity, an arrangement that provides
“flexible specialization.” Further, firms may wish to operate in well-known districts for the
marketing advantages of locating where company procurers and household consumers of their
goods know to shop to get the best selection.
It may not matter as much where such industrial districts are located as that they
somehow got an early start there, perhaps because of a historical accident. For example, in
the United States, many Innovative computer firms located in Silicon Valley, California, simply
because other such firms were already located there. Analogously, suppliers to shoe firms
located in the Sings Valley in southern Brazil and in Guadalajara in Mexico because so many
shoe firms located in those regions. Some of the benefits are gained simply by the fact of
location-Khalid Nadvi has termed this “passive collective efficiency- but other benefits must be
achieved through collective action, such as developing training facilities or lobbying
government for needed infrastructure as an industry rather than as individual firms
(“active collective efficiency”).
Nevertheless, clustering can generate more specialized employment in the rural non-
farm sector, as in the rural hand-loom weaver clusters of Ethiopia, in which micro
entrepreneurs share a work space, take part in a finer division of labor, and benefit from trade
credits for working capital. Researchers also found that better electricity reliability and other
infrastructure that are available to a cluster lead to better firm performance; in particular,
“producers in electrified towns work longer hours than those in towns without electricity.”
Efficient Urban Scale
Congestion - An action taken by one agent that decreases the incentives for other
agents to take similar actions. Compare to the opposite effect of a complementarity. In large

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
urban areas, workers may find themselves with longer and longer commutes and greater
transportation costs and may demand higher wages to cover these costs. In addition, the
costs of infrastructure such as water and sewer systems are higher in concentrated urban
areas.
Under competitive forces, and other things being equal, if workers are mobile, a
worker in a large city with higher wages but higher costs of living (such as higher housing
prices) is no better off in real material terms than a worker with comparable education,
experience, ability, and health in a small city who has lower wages and lower costs of living.
We can “create” more central city land by building skyscrapers, but only to a certain scale and
only at substantial cost. Thus, it is normal for an economy to have a range of cities, with sizes
dependent on the scale of the industries it sponsors and the extent of agglomeration
economies found for that industry or cluster of industries.
In the urban hierarchy model, originated by August Losch and Walter Christaller, plants
in various industries have a characteristic market radius that results from the interplay of three
factors: economies of scale in production, transportation costs, and the way the demand for
land is spread over space. The larger the economies of scale in production and the lower the
transportation costs, the larger the radius of territory that will be served by that industry to
minimize costs. In contrast, if the price of real estate is bid up to high levels in the resulting
cities, this will tend to create smaller radii. As a result, small cities contain activities same
principle has applied elsewhere over longer historical periods. Of course, as nations become
wealthy, they generally build better transportation systems.
A key problem of countries such as Peru and Argentina is that their giant capitals suffer
from enormous levels of congestion, but adequate midsize cities that might provide alternative
locations for growth are lacking. A well-designed infrastructure development program,
including more efficient links between medium-size cities and better roads, utilities, and
telecommunications within these cities, can help alleviate this problem.
III. THE URBAN GIANTISM PROBLEM
What is Urban?
Urban areas are usually characterized by their high populations, services, and a
population of many students and young professionals.
Urban: Current Perceptions
Urban areas have seen a rise in job opportunities, making them attractive places to live,
work, and study, but there are also negative perceptions due to derelict land, poverty, and crime.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
What is Urban Giantism?
It refers to the unplanned and unsustainable growth of cities, typically characterized by

extensive horizontal development, low population density, and excessive reliance on private
vehicles for transportation.
The urban giantism problem arises when cities expand without proper urban planning and
land use regulations, resulting in a number of challenges, including:
Environmental degradation: Urban giantism often leads to deforestation, loss of agricultural land,
and resulting in environmental degradation
Increased energy consumption and pollution:Higher use of private vehicles, and increased
demand for infrastructure, air pollution, and noise pollution.
Reduced quality of life: As cities expand without adequate planning, it can lead to fragmented
and disconnected communities, reduced access to public services and amenities,and resulting
in a reduced quality of life for urban residents.
Economic inefficiencies: Urban giantism can lead to inefficient land use, increased infrastructure
costs, and higher maintenance and service delivery expenses for local governments, resulting in
economic inefficiencies and strain on public resources.
Social inequalities: Rapid urban expansion can exacerbate existing social inequalities, as
marginalized communities may face displacement, lack of access to affordable housing, and
reduced access to education, healthcare, and other services.
Transportation challenges: Urban sprawl often results in increased dependence on private

vehicles for transportation, leading to traffic congestion, increased fuel consumption, and
reduced accessibility for non-motorized transportation modes, such as walking and cycling.
Cause of Urban Giantism
Mostly firms want to remain within the capital cities or others existing urban giants which
are all too often over populated and find their resources straining. For example New York city is
the largest metropolitan area in the United States, however, according to the US census bureau,
there are only 19,541,453 people living in New York State as a whole, compared to 307,006,550
people in the United States as a whole (2009 estimates), i. e. approximately 6% of the National
population.
The extreme overpopulation means that not only are the bare essential resources
strained, hiking up cost of production, but also the infrastructure may be unsuited to

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124

accommodate the further expansion in population which, will result from more and more firms
opening, and urbanization as people from other cities and rural areas seek job opportunities and
to improve their standard of living. To understand how urban bias may result from unbalanced
growth, we must first consider possible causes of unbalanced growth and increased rural- urban
migration.
Cause of and effects of Urbanization
Two causes of Urbanization

1. Natural Population increase
2. Rural to Urban Migration
And also Urbanization affect all sizes of settlements from small village to town to cities leading
up to the growth of mega cities which have more than 10 million people
IV. THE URBAN INFORMAL SECTOR
 After findings in various emerging nations that significant increases in the urban labor
force failed to appear in formal modern-sector unemployment figures, the presence of a
disorganized, unregulated, and mainly legal but unregistered informal sector was
acknowledged in the 1970s.
 The majority of newcomers to the urban labor sector appeared to establish their own
job or work for modest, family-run businesses.
 The self-employed were involved in a wide variety of enterprises, including selling

pyrotechnics, prostitution, drug dealing, and snake-charming, as well as hawking, street
vending, letter writing, sharpening knives, and rubbish collection.
 Some could ultimately move into the official sector, where they would be required to
register with the government, obtain licenses, and adhere to government labor laws.
 More focus is being placed on the role of the informal sector as a solution to the
growing unemployment problem because the rate of growth of the urban population in
developing countries is expected to continue at an unprecedented rate, and because
the formal rural and urban sectors are increasingly failing to absorb additions to the
labor force.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
What is Informal Sector?
 The part of the urban economy of developing countries characterized by small

competitive individual or family firms, petty retail trade and services, labor-
intensive methods, free entry, and market-determined factor and product prices.
 A part of a country's economy that is not recognized as normal income sources. It

includes illegal activities, such as drug pushing and smuggling, and people who must
work without receiving any pay. Economists do not include the informal sectors’
components when calculating a country's GDP, meaning that countries are richer than
official statistics suggest.
 The informal sector is characterized by small-scale production and service activities

that operate like monopolistically competitive firms, with lower productivity and income
than in the formal sector. Many workers are recent migrants from rural areas, relying on
their own indigenous resources to create work.
V. MIGRATION AND DEVELOPMENT
MIGRATION
An umbrella term, not defined under international law, reflecting the common lay
understanding of a person who moves away from his or her place of usual residence,
whether within a country or across an international border, temporarily or permanently, and for a
variety of reasons.
TYPES OF MIGRATION
 Gross Migration
The total flow of migrants across a border, in-migrants + out-migrants, or in the
case of international migration, immigrants + emigrants

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124

 Net Migration
The number of immigrants minus the number of emigrants, including citizens and
non-citizens.
 International Migration
The movement of people across international borders for the purpose of
settlement.
 Internal Migration
The movement of people between usual residences within national states.
 Voluntary
Occurs when someone chooses to leave home.
 Involuntary
Forcibly induced movement of people through and/or contained in space
Brain Drain
Definitions
 Relates to educationally specific selective migration.

 Some countries are losing the most educated segment of their population.
 It can be both a benefit for the receiving country and a problem for the country
of origin.
Receiving Country
 Getting highly qualified labor to contribute to the economy right away.

 Promotes economic growth in strategic sectors (Science and technology).
Country of Origin
 Education and health costs are not paid back.

 Losing potential leaders and talent.
 Long-term impact on economic growth.
 Possibility of remittances
 Many brain drain migrants have skills that they can't use at home:
Resources and technology.
A specific labor market is not enough.
 May eventually comeback with skills and connections.

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
VI. TOWARD AND ECONOMIC THEORY OF RURAL - URBAN MIGRATION
The Economic Development of Western Europe and the United States was closely
associated with the movement of labor from rural to urban areas. For the most part, with a rural
sector dominated by agricultural activities and an urban sector focusing on industrialization,
overall economic development in these countries was characterized by the gradual reallocation
of labor out of agriculture and into industry through rural-urban migration, both internal and
international.
Todaro Migration Model

A theory that explains rural-urban migration as an economically rational process
despite high urban unemployment.
Harris-Todaro Model
An equilibrium version of the Todaro migration model that predicts that expected
incomes will be equated across rural and urban sectors when taking into account
informal-sector activities and outright unemployment.
Diagrammatic Presentation of Harris-Todaro Model

This process of achieving an unemployment equilibrium between urban expected
wages and average rural income rather than an equalized rural-urban wage.
Variables and Parameter

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
Basic Equation
REFERENCES:

STATE UNIVERSITY
Pablo Borbon Campus
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124

Todaro, Michael and Smith, Stephen. 2015. Economic Development. 12th Edition. Addison
Wesley Longman. Retrieved from https://www.studocu.com/ph/document/university-of-
southern-mindanao/economics/chapter-5-urbanization-and-rural-urban-migration-theory-
and-policy/31163634
Tanyanyiwa, V. I. & Kanyepi, T. (2020). No Poverty. Shanty Towns: A Solution to Housing

Shortage Problems. Retrieved from
https://link.springer.com/referenceworkentry/10.1007/978-3-319-69625-6_62-1
Cox, W. (2020). DEMOGRAPHIA WORLD URBAN AREAS, 2020: TOKYO LEAD DIMINISHING.
Retrieved from https://www.newgeography.com/content/006693-demographia-world-
urban-areas-2020-tokyo-lead-diminishing
National Geographic Society. (2022). Urbanization. Retrieved from

https://education.nationalgeographic.org/resource/urbanization/.
Conserve Energy Future. (2023). Causes, Effects and Solutions to Urbanization Leading to
Urban Growth. Retrieved from https://www.conserve-energy-future.com/causes-effects-
solutions-urbanization.php
https://www.worldbank.org/en/topic/urbandevelopment/overview#1

Ecodev - Chapter 5

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ecodev - Chapter 5

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

College of Accountancy, Business, Economics and International Hospitality Management

MIGRATION AND URBANIZATION

IN PARTIAL FULFILLMENT OF THE COURSE SUBJECT

BACHELOR OF SCIENCE IN MANAGEMENT ACCOUNTING

Carandang, Thea Ysabelle M.

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

INTENDED LEARNING OUTCOMES

After studying this module, the students will be able to:

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

I. URBANIZATION: TRENDS AND LIVING CONDITIONS

Urbanization is the Agglomeration of Population in Cities.

Creates a society where values and lifestyles are urban.

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

Various Causes of Urbanization (Conserve Energy Future, 2023)

Industrialization is a trend representing a shift from the old agricultural economics

2. Social Benefits and Services

3. Modernization and Changes in the Mode of Living

As urban areas become more technology savvy together with highly

As localities become more fruitful and prosperous due to the discovery of

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

Urbanization Trends and Projection

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

Urban Population and Per Capita Income across Selected Countries

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

Annual Growth of World and Urban Population, 1950-2030 (in millions)

Developed countries are already urbanized.

Going through a major phase of urbanization.

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

Why People Move to Urban Areas?

 Major Changes in the World.

FACTOR CONDITION ISSUES

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

What is the Current State of Global Urbanization?

Megacities and Urban Regions

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

What Characterizes the Prevailing Urban Environment?

Difficulty to Access Housing:

Shanty Towns: A Solution to Housing Shortage Problems

Dwellings are built by the current or original occupant.

Inhabitants have no legal title to the land.

Lack of urban services.

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

 Land was illegally sold to dwellers being framed.

Although population growth and accelerated rural-urban migration are chiefly

II. THE ROLE OF CITIES

Leading Innovations, Transforming Lives, Building the Nation

College of Accountancy, Business, Economics and International Hospitality Management

 Agglomeration Economies - Cost advantages to producers and consumers from

 Urbanization Economies Agglomeration effects associated with the general growth

 Localization Economies Agglomeration effects captured by particular sectors of

Efficient Urban Scale

Leading Innovations, Transforming Lives, Building the Nation